# Calculate Inventory Using Absorption Costing

Question

DeAnne Company produces a single product. The company's variable costing income statement for August appears below:

 DeAnne Company Income Statement For the month ended August 31 Sales (\$20 per unit) \$ 802,000 Variable expenses: Variable cost of goods sold 521,300 Variable selling expense 80,200 Total variable expenses 601,500 Contribution margin 200,500 Fixed expenses: Fixed manufacturing 142,880 Fixed selling and administrative 35,720 Total fixed expenses 178,600 Net operating income \$ 21,900

The company produced 35,720 units in August and the beginning inventory consisted of 8,340 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. Under absorption costing, the ending inventory for the month ended August 31 would be reported at:

a. \$51,480

b. \$75,240

c. \$67,320

d. \$80,240

Summary

The question belongs to Accounting and it discusses about calculation of month end inventory using absorption costing.

Total Word Count 33

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